Buy-to-let rates have crept up in most categories since March, despite two cuts in the Bank of England base rate, analysis by Property Master reveals.

The buy-to-let broker found that average five-year fixed rates at 50 per cent loan-to-value increased by 31 basis points from 1.94 per cent to 2.25 per cent between March 1 and May 1.

At the same LTV, average two-year fixes rose by 28 basis points from 1.62 per cent to 1.9 per cent.

Two-year fixes at 65 per cent LTV increased by 12 basis points and five-year fixes at the same LTV rose by 11 bps.

At 75 per cent LTV two-year fixes rose by 6 bps but five year fixes came down by 4 bps.

Property Master chief executive Angus Stewart says: “The mortgage industry’s response to the Coronavirus has totally transformed this marketplace. 

“The past year up until now was one of continuing falls in the cost of buy-to-let mortgage borrowing as new lenders competed hard for landlord business. 

“We also saw lenders becoming more innovative by introducing new products in response to changing demand as landlords looked to diversify into new sectors such as holiday lets and houses of multiple occupation.

“Much of this has now gone into reverse.”

Stewart adds: “Our research out today shows that the cost of borrowing is up for some types of loans from some lenders despite the sharp falls in the Bank of England base rate. 

“Undoubtedly there are lenders widening their margins in response to the increased risks of tenant rent defaults and falling house prices. 

“But for me what is more striking still is how much lending criteria have changed in response to the pandemic.  

“After an initial flurry of lenders leaving the buy-to-let market altogether they are now returning but a number have reduced their LTV criteria, capped the amount they will lend or are ruling out various sectors such as HMOs, multi-unit blocks and holiday lets.”